The New South Wales Department of Planning and Infrastructure has recommended Wambo mine’s proposal to build a new water storage facility be approved.
The Hunter Valley coal mine is planning to build the Montrose Water Storage Facility west of Singleton.
The dam would be large enough to store 1,500 megalitres of water.
Currently water supplies for Peabody Energy's Wambo mine are stored in the South Dam which is scheduled for mining shortly.
The new dam would be located south-west of Wambo’s open cut limit.
The Office of Environment and Heritage has raised concerns, saying the mine should be required to offset the land it intends to clear to build the new dam.
Mine management have acknowledged this request and are now proposing two offset areas to be secured by a conservation agreement, the ABC reported.
The proposal has been referred to the Planning Assessment Commission for consideration.